Gold and Jewellery Consumption Spirals

Dubai’s association with the yellow metal is legendary. Right from the time that it was sleepy pearl fishing town to the glitzy commercial hub that it has become today, the lure of its gold trade has remained undiminished.

Dubai is the world's second largest distributor of bullion; it imports 360 tonnes and re-exports almost all of it (350 tonnes)

The World Gold Council's regional office in Dubai has announced that the UAE gold jewellery consumption increased by eight per cent in 2007 compared to 2006 despite the 15 per cent increase in gold price.

The retail gold sales increased by 24 per cent in 2007 in the UAE, 33 per cent in Saudi Arabia, 29 per cent in Egypt and 19 per cent in the other Gulf countries.

High and volatile gold prices had a major impact in the fourth quarter of 2007. Gold jewellery consumption dropped by nine per cent in the UAE, ten per cent in KSA, and 11 per cent in other Gulf countries. The effect of the gold price increase is worldwide and had an effect on tonnage terms from year-earlier levels.

This trend was most keenly felt in India, the world's largest and also most price-sensitive gold market, where demand fell 64 per cent on year-earlier levels following 40 per cent growth in the first three quarters. The US was also negatively impacted with a combination of a weak economy, poor retail environment and record prices denting jewellery demand which stood 14 per cent down on 2006 figures.

The Middle East showed a far less extreme reaction, as the demand was not as drastically affected as the rest of the regions. In addition, for the year as a whole, demand increased in the Middle East, and Egypt specifically was an exception in Q4 with demand rising on the back of an economic recovery resulting in 12 per cent growth for the year.

Commenting on the results in the region, Moaz Barakat, Managing Director of the World Gold Council in the Middle East, Turkey and Pakistan said: "Comparing the Middle East performance to the rest of the region, we are delighted to see that the high and volatile gold prices did not affect the gold market to the extreme as per the other regions."

City of Gold : Facts At a Glance                                                                                    Top

The per capita gold consumption in Dubai is the highest in the world.
76 per cent of all residents own gold

80 per cent intend to own gold in the next year

90 per cent of the jewellery market is solid gold jewellery

• More than two thirds of the population buys gold at least once a year.

• 48 per cent is for gifting.

• 28 per cent is for self.

• 95 per cent of all tourists buy gold.

On an average every five persons buys five pieces of jewellery every year.

• Each piece is worth US$400 on average, so the average yearly spend is US$2,000.

• Dubai is the Middle East supply hub for the jewellery market.

• 95 percent of all jewellery sold is above 21 karat; the rest is 18 karat.

• Dubai has over 600 shops, the densest concentration in the world.

• Dubai's Gold Souk has 275-plus shops in a half a square kilometre area.

• At any given time over 25 tonnes of gold is on display in jewellery shop windows.

• Jewellery is sold on gold price plus making charges unlike in the West, where it is per piece.

• Dubai made the world's longest gold chain during DSF-1999. The chain was made in 22k gold and measured 4.2 kilometers. 9,600 people bought the chain on necklace wear and bracelet size pieces

Statistics : Dubai Gold and Jewellery Group

Gold Buying Tips                                                                                                            Top

There are over 800 gold outlets in Dubai, including over 275 shops in the Gold Souk, Dubai's famous jewellery market alone. This means there is a dazzling variety of choice available.

Dubai is known for the purity of the gold products sold. Dubai Municipality Inspections Department also ensures quality through regular checks.

In short, you can be sure that gold and jewellery bought in Dubai is 'quality at the world's best price'.

Under local law it is mandatory for gold jewellery sold in Dubai to carry the gold purity hallmark.

Ensure that you collect the invoice with the description of the Jewellery purchased as you might require it at the airport. Please ask for the certificate of authenticity when buying diamond and gemstone studded jewellery.

Source : GoDubai.com